Rand slides as dollar steadies ahead of Fed

South Africa’s rand weakened on Friday, as the US dollar hovered near its recent peaks on expectations that the Federal Reserve would need to hike interest rates more to tame inflation.

At 1600 GMT, the rand traded at 17.6725 against the dollar, 0.48% weaker than its previous close.

The dollar index , which measures the currency against six rivals, was last trading at 109.73.

“The highly volatile domestic currency along with its EM peers continues to be affected by the strong greenback as investors favour safe haven inflows in a risk-off environment,” Investec analyst Annabel Bishop said in a research note.

Stocks on the Johannesburg Stock Exchange fell, following Wall Street and other equity markets as investors brace for the Fed’s rate decision next week.

Local investors will be looking at the South African Reserve Bank (SARB), which will convene a day after the Fed to mete out its own interest rate decision.

Economists polled by Reuters expect SARB to raise its key rate by 75 basis points.

Overall in the stock market, the Top-40 (.JTOPI) index dropped 1.6% while the broader all-share (.JALSH) index closed down 1.46%.

The government’s benchmark 2030 bond fell, with the yield up 3 basis points to 10.370%.